Trust Administration Services

What is Trust Administration?

Trust administration refers to the management of property held in a trust by a named trustee—according to the terms in the document and for the benefit of those who will inherit under the trust. There are a number of steps involved which safeguard the administration of a trust. Mandatory notice must be given to all beneficiaries named in the trust. Once this notice is received, the beneficiary has only a certain number of days to contest the trust. If no contest if filed within this time period, the ability to file a contest may be surrendered. 

If real property is held in the trust, titles must be transferred to the successor trustee. An affidavit will be recorded with a certified copy of the death certificate against real property held in the trust, transferring the title of the property from the decedent to the successor trustee. If property is transferred from parents or children by any method which is exempt from California property tax reassessment, the proper exemption form must be filed. Once all the real property is taken care of, other trust assets must have titles transferred. The successor trustee must ensure all debts of the decedent are paid, including taxes. When all assets are collected, all debts paid, all tax returns filed, and all debts paid, the remaining trust assets will be distributed.

FAQ: Administering a Trust in California

What Does a Trust Administrator Do?

When a revocable living trust is created, you name yourself as trustee during your lifetime. You also name a successor trustee to take over administration of the trust after your death, or in the event of your incapacitation. Naming a bank or an attorney as co-trustee during your lifetime allows you to benefit from their investment and trust management experience while determining whether you would be comfortable leaving them to administer the trust after your death.

The trust administrator takes care of all the assets in the trust for the beneficiaries named in the trust. A trust administrator can be an individual or an organization. When a trust administrator fails to comply with his or her legal duties, that trust administrator could become personally liable for any losses. The newly appointed trust administrator will want to assess the value of the assets held in the trust after all liabilities have been deducted.

This act will determine whether the trust is liable for federal or state taxes, and may vary considerably, depending on the value of the trust. The trust administrator must, at all times, act in good faith and in the best interests of the trust beneficiaries. If the trust administrator realizes any personal gain from carrying out the trust transactions, these must be disclosed. If a trust administrator fails to comply with the legal duties as set forth under California law, the beneficiaries of the trust may sue the trust administrator.

The trust administrator must keep records of all correspondence, all expenses and taxes paid, and all assets held in the trust (including any investments made) assets disposed of or any other transaction made for the estate. The beneficiaries of the trust are allowed to ask to see the trust accounts, therefore, the trust administrator must be able to explain any transaction. A trust administrator must always make prudent decisions. In addition, the trust administrator must treat all beneficiaries equally and fairly. Below is a sample list of the tasks a trust administrator might be asked to perform:

• Obtain legal documents and records necessary to administer the trust;
• Obtain legal documents and records necessary to certify the validity of the trust when dealing with third parties;
• Collect any money owed to the trust;
• Maintain an inventory of all trust property;
• Consult financial, legal, or tax advisors when necessary to properly administer the trust;
• Pay any expenses or debts attributed to the trust;
• Obtain valuations or appraisals for trust assets;
• Sell trust properties;
• File all tax returns;
• Provide up-to-date information to trust beneficiaries;
• Execute documents transferring title to trust property to beneficiaries, and
• Distribute trust income and property to beneficiaries.